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Business Observer Friday, Aug. 5, 2022 3 days ago

Clearwater tech firm launches investment arm

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KnowBe4 Ventures will partner with two other venture capital firms to support early-stage cybersecurity startups.

Clearwater-based KnowBe4 Inc. (NASDAQ: KNBE), a provider of security awareness training and a popular simulated phishing platform, has launched KnowBe4 Ventures, a venture-capital investment arm that will focus on early-stage startups that aim to enhance the human layer of cybersecurity — raising awareness about ransomware, CEO fraud and other social engineering tactics.

According to a news release, KnowBe4 Ventures will partner with a pair of other VC firms, Elephant and Ten Eleven Ventures, on investments. Both specialize in funding for cybersecurity startups, which KnowBe4 says is inadequate. 

Citing Verizon's latest Data Breach Investigations Report, the company states that 82% of data breaches involve a person or multiple people. But less than 3% of IT spending, the release states, is allocated to solutions that address the human layer of cybersecutiy.

“Cyber attacks continue to plague organizations in every industry,” KnowBe4 CEO Stu Sjouwerman states in the release. “The majority of these attacks target the human, so it is important to support founders taking on the challenge of improving security culture and accelerating the importance of securing the human layer.”

KnowBe4 Ventures, the release states, is specifically looking to invest in startups that are in seed through Series B funding stages. Candidates for funding should address the human layer of cybersecurity or have an integration case with KnowBe4’s products; be actively raising money and have a lead investor identified; have a product in the market and initial customer traction; and have a compelling financial strategy, unit economics and long-term growth potential.

KnowBe4 Ventures’ portfolio, the release states, already includes Washington, D.C.-based Adlumin, Doral-based LUMU Technologies and EasyDMARC, headquartered in Middletown, Delaware.

KnowBe4 reported $246.3 million in gross revenue in 2021, up from $174.3 million in 2020, an increase of nearly 41%. 

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